Please enable JavaScript.
Coggle requires JavaScript to display documents.
Revenue Cycle - Coggle Diagram
Revenue Cycle
Sales
Credit Approval
- The Credit Department determines whether the customer may receive goods on credit
- A copy of the approved sales order is sent to the shipping department
Shipment
- A Serially numbered bill of lading is prepared, and copy is sent to customer
- Once the goods are shipped, and a receivable is created based on invoice shipping terms
-
billing
- The billing department prepares a serially numbered sales invoice
- The invoice is then sent to the customer and to the accounts receivable department
Accounting
The sale is entered into the sales journal, and receivable is recorded.
Account Receivable
-
-
-
Sale Returns
- returned goods must be examined and create a sale return slip
- Credit memos should not be prepared by individuals who collect or receive cash payments on accounts receivable
Sales
- Periodically, an independent person should reconcile these general ledgers to sub ledger
Cash Receipts
-
Accounts Receivable Department: Enters receipts into the accounts receivable subsidiary record.
The accounts receivable department should match the details from the bank deposit ticket with the details from the remittance advices
-
-
Notes:
What are some common audit procedures related to the revenue cycle:
- Completeness: Trace a sample of shipping documents to sales invoices and the sales journal
2.Existence: Vouch a sample of sales transactions from the sales journal to the shipping documents
- Existence: Confirmation of a sample of accounts receivable
- Cutoff: Examine sales transactions from shortly before and after year-end for recording in the proper period
5.Valuation: Testing of the allowance for credit losses
- Completeness and Presentation: Read sales-related disclosures to ensure that they are clear and understandable and that all required disclosures have been included